Global Marketing

Global Marketing Krunal Mamtora

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Global marketing is defined as the process of adjusting the marketing strategies of your company to adapt to the conditions of other countries. Of course, global marketing is more than selling your product or service globally. It is the full process of planning, creating, positioning, and promoting your products in a global market.[1] Global marketing expansion is currently being widely promoted in both the professional and academic communities. Everywhere, the business community is hearing such popular buzz words as global economy, international marketing, global markets and foreign business. Domestic markets alone cannot provide enough revenue or growth opportunities for many business organizations throughout the world. [2] Global marketing is particularly important for products that have universal demand, such as food and automobiles. Thus, a beverage company is likely to be in more markets than say, a wooden toy company; but even a wooden toy company may find niche markets in diverse corners of the world. Since global marketing involves a variety of different products and opportunities, it’s impossible to identify a single customer profile. A global company must be prepared to develop multiple profiles for each of the different regions it trades in. [3] There is a new profile of consumer in the marketplace of the twenty‐first century – one who buys the same brands promoted in global as well as local media throughout the world. This new consumer is best described as the “global consumer”. Understanding global consumer orientation is the first phase of corporate learning about how to compete in the world market. Further, understanding the new global consumer drives the development of business‐to‐business just as much as it drives consumer marketing. Perhaps more so, because globalization of markets often occurs earlier and advances faster for business‐to‐business products. Global market segmentation can be viewed as the process of identifying segments whether they be country groups or individual buyer groups, of potential customers with homogeneous attributes who are likely to exhibit similar buying behaviour patterns. [4] [5] The exploration of competition between local and global brands has attracted the interest of researchers because it is important to understand which branding or marketing strategies are effective in shaping consumer attitude and behaviour in emerging markets. A brand is defined as “global” if it has global recognition, availability, acceptance and desirability and usually enjoys the same positioning, name and image across countries coupled with standardized and centrally coordinated marketing activities. On the other hand, a brand is called “local” if it is available in only one country or in a narrow geographical area, regardless of its ownership by local or global firms. Research has shown that neither local nor global brands prove successful all the time in all emerging markets. The implication for positioning global brands is that local brands might challenge global brands head-to-head in emerging markets. Therefore, global brands may have to find alternate positioning strategies and rely on their expertise to capture the hearts and minds of consumers. They can emphasize global consumer culture expectations in their category, global recognition and availability, and act as a signal of global belongingness to a specific segment. Marketers can communicate this positioning strategy through advertising campaigns and distribution choices that emphasize global brand associations of quality and prestige, as well as by providing globally standardized functional- and performance-related aspects. Expertise related to the product category can be implied through marketing communications as well as global themes of love, sports and the environment, and worldwide celebrities may be used to underline the reputation of the brand in emerging markets. [6] Global markets can be serviced using wholly‐owned subsidiaries, joint ventures, franchise agreements, exports, and non‐ exclusive dealers. The selection of marketing strategies in global markets is influenced by the nature of product and country characteristics as well as organizational factors. In certain situations, it may be beneficial for firms to standardize some aspects of the marketing strategy across the world, while accommodating local market differences by localizing other aspects. To implement hybrid strategies that combine standardization of some elements with localization of other elements so as to maximize the value of product offerings, firms must adopt flexible organizational arrangements that permit the use of country‐specific knowledge. Franchising arrangements permit the adoption of hybrid strategies by allowing the franchisor to standardize some elements of the marketing mix, while allowing franchisees to modify other marketing mix elements to suit local markets. Franchisees supply the local market knowledge and country‐specific management skills, while franchisors supply the remaining characteristics required to satisfy buyer needs and retain overall control. [7] In many countries, it is not mass media campaign, money pumped into marketing and distribution that will bring result. A good understanding of the local market is a pre-requisite for success and the best way to ensure is through a joint venture global marketing partnerships or marketing tie-up with a local partner in the same business. This will enable the global firm to attain market supremacy at a much rapid pace. Honda, Renault, Suzuki, Swedish firm Forbes launched vacuum cleaner in India in 1980’s (Eureka Forbes through a joint venture in India) Starbucks (Tatas), Sharp (Kalyani) and several global brands by established their foothold in India through tie-ups with local companies. Tie-ups can be in the form of 50:50 joint ventures, or marketing tie-up. Companies confident of going ahead on its own can set up fully-owned subsidiaries. The joint 1

venture arrangements can be for a specified period after which both companies are at liberty to launch their own brands. When Hero severed its ties with Honda for two wheelers, Renault for cars with Mahindra, the companies concerned launched their own products. [8] Key value sources for Prestige brands are that consumers prefer global brands because of associations with higher prestige and some of these brands can draw upon the myths associated with a foreign cultural origin. Moreover, they benefit from economies of scope in marketing – pooling of best ideas of marketing campaigns and media spill over, especially related to world travel. It is no coincidence that Prestige brands are heavily advertised in the world's ultimate deterritorialized place – the airport. While cost considerations matter to any brand, economies of scale are not primary considerations for these brands. Finally, Prestige brands have an edge in attracting top talent in the home country. [9] Global branding must be driven by collaboration among local markets, both with each other and with central marketing. Because local markets do face unique competitive challenges, each country organization should bring to the table data on its own market. Rather than using that data only as evidence of differences, each party must be committed to sifting through the data to find the common ground. This process can be facilitated, but not forced, by the central marketing function. [10] An important aspect of global brand management concerns the degree to which a brand can and should be standardized. Obviously, not all elements can be completely standardized, nor have to be standardized, for a global brand to exist. In fact, many global brands have adopted a dual approach in which a global myth is sustained while local elements are developed to maximize the impact of the brand at the local level. By creating local elements that work in concert with the global vision of the brand, brand coherence can be sustained. Contrary to what many practitioners believe, presence of local elements does not necessarily imply that the brand becomes disjointed or fails to deliver on the brand's global vision. [11] Technology is bringing nations and culture close together. However, this converging commonality is not mandating standardized product but standardised product. The successful marketer will take advantage of unique market preference to position the firm’s product more astutely than competitive offerings. [12] Global brands enjoy economies of scale and scope, emanating from efficiencies in manufacturing, R&D, logistics, as well as potential cost reductions in packaging and communications. As such, global brands are often able to compete more effectively on price, not only in terms of reduced costs, but – with higher perceptions of quality and prestige – they also have a greater ability to charge a price premium. On the other hand, if the quality perception of the local brand is perceived as equal to (or better than) foreign/global alternatives, then so too should the local firm have the ability to charge a price premium. Thus, if consumers recognize the L-G brand as having a higher price but being of similar quality to the competing F-G brand, all other things being equal, they should be less willing to purchase the expensive L-G brand and more willing to purchase the cheaper F-G brand. Similarly, if the F-G brand is deemed more expensive than the local alternative (again assuming equal quality perceptions), consumers should be less willing to purchase the F-G brand and more willing to purchase the L-G alternative. [13] [14] [15] The A‐B‐C‐D paradigm is an attempt at providing a comprehensive framework that will enable marketers to understand, integrate and apply consumer behaviour findings in global markets. Access. The first step in global marketing is to provide access to the product/service for consumers within a culture. Access pertains both to physical access as well as to economic access. Buying behaviour. This stage encompasses all factors impacting on decision making and choice within a culture. Examples of these factors include perceptions, attitudes, and consumer responses such as brand loyalty. Consumption characteristics. The specific products/services that are purchased and consumed may be different in each culture. The cultural orientation (traditional versus modern) and social class distribution, among other factors, will determine consumption patterns within a culture. Disposal. Most countries, including the developing countries, are becoming more environmentally conscious and moving away from throw‐away products. Hence marketers need to design systems to facilitate the safe disposal, recycling, resale, or remanufacturing of products. They must also meet their social responsibilities in other countries, especially in relation to public safety and environmental pollution. [16] The product and service mix are one of the most important ingredients for the global marketer today. The diverse demand for products and services in the era of globalization is mind-blowing. Presence of industrialized and emerging markets, increasing purchasing power, and the growth of Internet has made the customers aware, smart, and more demanding. The result is a greater competition between firms. The global consumer makes purchasing decisions to get the best quality products at the most affordable price. They have information available in abundance, thanks to the Internet. Therefore, innovation takes centre-stage to gain adequate attention from potential consumers. A global marketer must be flexible enough to modify the attributes of its products in order to adapt to the legal, economic, political, technological or climatic needs of a local market. Overall, global marketing requires the firms to have available and specific processes for product adaptation for success in new markets. Culture can differentiate a standardized product from an adapted one. Making cultural changes in product attributes is like introducing a new product in your home country. 2

The product should meet the needs, tastes, and patterns that are permitted by the market culture. Lastly, it is essential to understand that a product or service is not just one "thing." It should be seen as a part of the whole marketing mix so that a great synergy can be built among different strategies and actions. [17] Developing a global marketing strategy helps your business in many ways. The first way is that marketing globally improves the effectiveness of your company’s products and services. As your company grows and learns, the more effective you become at rolling out new and improved products or services. As your company continues to offer your customers better options and offers, your company should share their improvements with a wider audience. Creating a global marketing strategy allows your company to do this. Another feature of a global marketing strategy is that it creates a stronger competitive advantage for your company. Many companies don’t have a difficult time at competing on a local basis. If your company has no problem competing on a local basis, this is your chance to improve your competitive advantage and compete on a global basis. Competing on a global basis allows customers worldwide to be better-informed and more focused on the products and services you offer. Creating a comprehensive global marketing strategy also allows your company to adapt quickly wherever needed based on customer demands and trends in the global marketplace. [25] The contentious issues with online marketing The Internet, especially the world‐wide Web, has the potential to radically change business to consumer interaction which dramatically alters many aspects of marketing. However, when co‐ordinating global marketing strategies organisations should be aware that the Internet, despite offering an unprecedented opportunity to enhance international marketing, brings with it potential difficulties. As with any international marketing strategies consideration still needs to be given to language and cultural differences between countries. The Internet may reduce the size of the world in one sense but it does not eradicate the presence of fundamental cultural and language differences. Marketers still have to remain alert to the attitudes, norms, customs and values of the inhabitants of different countries when formulating their online global marketing strategies. Companies need to also be careful in using gestures and colours in global marketing, as they may have different meanings around the globe. For example, while the finger circling means “okay” for an American culture, it is considered obscene in Brazil and Germany. Thus, due to the inherently global nature of the Internet, organisations should evaluate the global impact of any online advertising and promotional material. From a marketing perspective the use of the Internet as a communication medium can have detrimental consequences for organisations. Attributes of Internet offer exceptional opportunities for individuals to criticise, defame and mock organisations easily and inexpensively, through the establishment of spoof sites (Web sites very similar to organisations’ corporate Web sites) and through the use of newsgroups. The extent of this problem is profound. Simple searches on the Web reveal the existence of many sites including www.walmartsucks.com, www.MurderKing.com and www.mcspotlight.org which explicitly defame and mock organisations and their practices. [18] [19] [20] Classic Blunders in Global Marketing: 1) Hallmark cards failed in France, where consumers dislike syrupy sentiment and prefer writing their own cards. 2) Philips became profitable in Japan only after reducing the size of its coffeemakers to fit smaller kitchens and its shavers to fit smaller hands. 3)Coca-Cola withdrew its big two-liter bottle in Spain after discovering that few Spaniards owned refrigerators that could accommodate it. 4)General Foods’ Tang initially failed in France when positioned as a substitute for orange juice at breakfast. The French drink little orange juice and almost never at breakfast. 5) Kellogg’s Pop-Tarts failed in Britain because fewer homes have toasters than in the United States and the product was too sweet for British tastes. 6) The U.S. campaign for Procter & Gamble’s Crest toothpaste initially failed in Mexico. Mexicans did not care as much about the decay-prevention benefit nor the scientifically oriented advertising appeal. 7)General Foods squandered millions trying to introduce packaged cake mixes to Japan, where only 3 percent of homes at the time were equipped with ovens. 8)S. C. Johnson’s wax floor polish initially failed in Japan. It made floors too slippery for a culture where people do not wear shoes at home. [21] Global marketing has its pitfalls, but it can also yield impressive advantages. Standardizing products can reduce operating costs. Even more important, effective coordination can exploit a company’s best product and marketing ideas. Proponents of the “standardization” approach to international marketing claim that it offers benefits in terms of increasing managerial control, reducing costs, simplifying strategic planning efforts, and taking advantage of home‐country headquarters expertise. While proponents of the “localized” or “adaptive” approach to marketing strategies argue their position by differentiating voluntary (the marketing mix variables controlled by the international marketer) from compulsory (legislative and regulatory intervention by host country governments) modifications. Standardization is more effective than adaptation, because it gives the marketer an edge over other competitors in terms of time and money. Because a standardized marketing program is superior in quality to what localized approaches can accomplish, even with the benefit of local market knowledge, executives may welcome it. [22] [23] 3

References: [1] https://www.cleverism.com/global-marketing-strategies/ [2] Global marketing challenges and opportunities for manufacturers’ representatives by Marilyn Stephens, Marketing Intelligence and planning (1996) [3] https://www.marketing-schools.org/types-of-marketing/global-marketing.html [4] Understanding the new bases for global market segmentation by Salah S. Hassan, Stephen Craft, Wael Kortam, Journal of Consumer Marketing (2003) [5] Blackwell, R.D., Miniard, P.W. and Engel, J.F. (2001), Consumer Behavior, 9th ed., TX. [6] Exploring local vs global brand associations in an emerging market using BCM technique by İrem ErenErdoğmuş, Taşkın Dirsehan, Qualitative Market Research (2017) [7] Franchising in global markets: towards a conceptual framework by C.M Shashi and Devi Prasad Kuruppur, International marketing review (2002) [8] https://www.educba.com/global-marketing-strategy/ [9] How global brands create firm value: the 4V model by Jan-Benedict Steenkamp, International Marketing Review (2014) [10] Brand globally, market locally by Jennifer Barron, Jim Hollingshead, Journal of business strategy (2004) [11] How global brands travel with consumers: An examination of the relationship between brand consistency and meaning across national boundaries by Anders Bengtsson, Fleura Bardhi, Meera Venkatraman (2010) [12] Global marketing: A new Manifest destiny by Charles T. Crespy (1986) [13] Global vs local brands: how home country bias and price differences impact brand evaluations by Warat Winit , Gary Gregory , Mark Cleveland , Peeter Verlegh (2014) [14] Batra, R., Ramaswamy, V., Alden, D.L., Steenkamp, J.-B.E.M. and Ramachander, S. (2000), “Effects of brand local and nonlocal origin on consumer attitudes in developing countries”, Journal of Consumer Psychology [15] Keller, K. (1993), “Conceptualizing, measuring, managing customer-based brand equity”, Journal of Marketing [16] Consumer behavior in global markets: The A‐B‐C‐D paradigm and its application to eastern Europe and the Third World by PS Raju (1995) [17] https://www.tutorialspoint.com/international_business_management/global_marketing_mix.htm [18] “The Internet revolution: some global marketing implications” by T.C Melawar, Nicola Smith (2003) [19] Peterson R.A, Balasubramanian, S. and Bronnenberg, BJ. (1997) “Exploring the implications of the internet for consumer marketing’ [20] Baily L. (1998), “The triumph of an individual”, New Statesman [21] KOTLER, P. & KELLER, K. 2016. Marketing Management 15e Global Edition, Pearson. [22] Global markets and the new product development process by Rama Yelkur, Paul Herbig(1996) [23] Jain, S.C. (1987), “Perspectives on international marketing strategic alliances” [24] Global Marketing 9th Edition, Kindle Edition by Warren J. Keegan (Author), Mark C. Green [25] https://www.techfunnel.com/martech/importance-of-global-marketing-strategies-for-businesses/ 4